Stroudsburg, PA Bankruptcy Lawyers
Many people in Stroudsburg struggle financially. Whether it is a loss of job, reduced hours, or an unforeseen medical emergency, many people find themselves in an unanticipated and overwhelming economic crisis. For many of these people, filing for bankruptcy is a viable option to put things right. Unfortunately, there are so many misconceptions and misunderstandings regarding bankruptcy that people in need turn to other, less effective means or ignore their problems altogether.
One of our goals at Young, Marr, Mallis & Associates is to help people understand the benefits, advantages, and drawbacks of filing for bankruptcy. While bankruptcy is a powerful tool, it is not for everyone. Our experienced Stroudsburg, PA bankruptcy lawyers will sit down with you in a free and confidential consultation to discuss the process in detail.
When you are facing an economic crisis, you want to weigh all of your possible options. For many individuals, filing for bankruptcy is a great choice. If you are considering bankruptcy or other options, call (215) 701-6519 to speak with a compassionate attorney interested in helping you obtain a fresh start.
Bankruptcy is an effective tool in managing or eliminating debt. However, not all debt is created equally. A substantial amount of debt people have, including medical bills, credit card debt, and personal loans, is unsecured and dischargeable in bankruptcy. This means that it could be eliminated.
Secured debt is somewhat different. It is debt that is attached to a piece of collateral or property. When you default on a secured debt, the lender is entitled to repossess the collateral. For example, a car loan is a secured debt. If you miss a payment or two, your car will likely be repossessed.
Similarly, your mortgage is secured by your home. A mortgage lender will foreclosure on your home if you miss too many mortgage payments. This type of debt is dischargeable. However, you will lose the property. Fortunately, you could pay back the money you are behind through a Chapter 13 bankruptcy.
Some debt is considered non-dischargeable. When Congress enacted the Bankruptcy Code, it determined that, as a matter of social policy, certain debts could not be eliminated in bankruptcy. For example, you are not permitted to discharge alimony, child support, criminal restitution, and certain taxes. While it is technically dischargeable, student loan debt is, for all practical purposes, a non-dischargeable debt.
One of the first questions most potential filers have regarding bankruptcy is, “will I lose my property?” If you look up bankruptcy, you will find that your property could be sold to pay your creditors. However, both federal and state law provide ways to protect your assets.
These protections are called exemptions. If you file for bankruptcy in Stroudsburg, you have the option of choosing either the federal or state exemptions. The federal exemptions are more generous, but there are cases when the Pennsylvania exemptions are more advantageous. Unfortunately, you are not permitted to pick and choose single exemptions – you must use the federal or state sets. Our Stroudsburg bankruptcy attorney will review your property and the available exemptions with you.
The Automatic Stay
Bankruptcy not only allows you to discharge or reorganize your debt, it also provides a powerful legal tool that protects you from your creditors. An automatic stay is an injunction that creates a wall between you and your creditors. The initial impact of this stay is readily apparent – the annoying phone calls, emails, and letters will cease. Your creditors are barred from contacting you or requesting a payment. The real benefit is how legal proceedings are affected. For example, if a creditor froze your bank account or garnished your wages, both would have to stop. Additionally, if you were a party in a pending lawsuit, the proceedings would be stopped. This means that if your home were in foreclosure, filing for bankruptcy would stop it. In some situations, filing for bankruptcy could force a lender to return a repossessed vehicle.
Chapter 7 Bankruptcy
Chapter 7 is the most common bankruptcy. It is quick, relatively simple, and allows people to eliminate most of their unsecured debt in a matter of months. However, it is designed for people with limited assets and income. To be eligible to file a Chapter 7 case, you must pass a Means Test. This test calculates your average monthly household income and compares it to the median average in your geographical area. For people with significant credit card debt or medical bills, filing for Chapter 7 is the fastest way to starting fresh and improving their credit score.
Chapter 13 Bankruptcy
Chapter 13 is designed to allow people to reorganize their debt. If you are behind on your mortgage or car payments, Chapter 13 provides a means to catch up while protecting you from legal action. You could also pay back taxes and other non-dischargeable debts through your bankruptcy plan. For people who have too much income to file for Chapter 7, a Chapter 13 bankruptcy might allow you to pay a portion of your debt while discharging the balance. Our Stroudsburg bankruptcy lawyers will review your debt and income to determine if filing for Chapter 13 is beneficial.
Our Stroudsburg, PA Bankruptcy Lawyers Can Help
To see the benefits and advantages of filing for bankruptcy, you have to understand the process. At Young, Marr, Mallis & Associates, our Stroudsburg, PA bankruptcy attorneys are available to answer your questions and address your concerns. Our goal is to provide our clients with the best possible representation. To achieve this, our clients must become familiar with the ins and outs of bankruptcy. Call (215) 701-6519 if you have questions regarding filing for bankruptcy or feel overwhelmed with debt.